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Australian lender ANZ has announced the sale of its 20 per cent stake in Shanghai Rural Commercial Bank to two Chinese state owned enterprises.

COSCO Shipping Corporation Limited and Shanghai SinoPoland Enterprise Management will each acquire 10 per cent of SRCB for a combined 9.19 billion yuan (US$1.32 billion). The bank bought the stake for US$408.77 million in 2007.

The announcement is the latest stage in ANZ’s withdrawal from retail banking in the region. In October, the lender announced the sale of its retail banking and wealth management operations in Singapore, Hong Kong, China, Taiwan and Indonesia to Singaporean bank DBS.

ANZ deputy chief executive officer Graham Hodges said the sale of ANZ’s stake in the Shanghai-based bank reflected its strategy to simplify its business and improve capital efficiency.

The deal will boost the bank’s core equity tier one capital ratio by approximately 40 basis points.

“The sale will also allow us to focus our resources on our institutional banking business in Asia,” Hodges added.

The bank has had a presence in China for 30 years and fully-owns branches in Beijing, Shanghai, Guangzhou, Chongqing, Chengdu, Hangzhou and Qingdao serving institutional clients, Hodges said.

In 2012, the bank’s then chief executive, Mike Smith set a target for ANZ to gain 30 per cent of its earnings from Asia Pacific, Europe and the Americas by 2017, doubling the level at that time. This strategy was abandoned by current chief executive Shayne Elliott last year.

ANZ invested in Shanghai Rural and Commercial Bank in 2007, and also holds a 20 per cent stake in Bank of Tianjin, which it purchased in 2005. Elliott said in November that the bank was looking to sell this stake, along with its interests in P.T. Bank Pan Indonesia and Malaysian bank AMMB Holdings.

In the past few years a number of foreign banks have sold off stakes in mainland Chinese banks that they bought in the 2000s.

RBS sold its 4.3 per cent holding in Bank of China in 2009, while in 2013 Goldman Sachs sold about $1bn worth of shares in Industrial and Commercial Bank of China.

Later that year, Bank of America sold its remaining shares in China Construction Bank for $1.47bn.

In March 2016, Citibank announced it would sell-off its 20 per cent stake in China Guangfa Bank to China Life insurance, and in December 2015, Deutsche Bank announced the sale of its of 20 per cent stake in Huaxia Bank.

HSBC however, retains a 20 per cent stake in Bank of Communications, which chairman Stuart Gulliver described in November as the bank’s “flagship in China”.